ASA International Group LON: ASAI reported higher first-half profit, loan portfolio growth and an expanded client base, while outlining continued investment in digital systems, new products and a planned entry into the Democratic Republic of Congo.
Reported net profit rose 70% year over year to $45.6 million in the first half of 2026. Excluding favorable one-off items related to India, underlying net profit increased 42% to $34.3 million, Chief Executive Officer Rob Keijsers said during the company’s interim-results webcast.
The company declared an interim dividend of $0.069 per share, based on underlying net profit. The payment was 43% higher than the prior-year interim dividend. ASA International was also admitted to the FTSE All-Share Index in June.
Loan portfolio and client growth
ASA International’s client base exceeded 2.7 million at the end of the first half, representing 11% growth versus the same period in 2025. Its outstanding loan portfolio reached $600 million, up 18% year over year on a reported basis and 24% on a constant-currency basis.
The company said it now reports client, branch and loan-portfolio figures excluding India to better reflect continuing operations. The decline in the total client base from 2.8 million at the end of 2025 largely reflected the wind-down of Indian operations, Head of Investor Relations Jonathan Berger said in response to a webcast question.
Keijsers said East Africa remained the group’s largest segment, with outstanding loan portfolio growth of 29%, led by Kenya and Uganda. West Africa recorded 7% growth, driven by demand in Nigeria, though Ghana’s dollar-reported performance was affected by depreciation of the cedi.
South Asia’s loan portfolio was reduced to $4.3 million at the end of June due to the planned India exit. Excluding India, South Asia grew 42%, primarily driven by Pakistan. In Southeast Asia, the company cited 13% constant-currency growth, while reported performance reflected the use of Myanmar’s market exchange rate rather than the central bank rate used a year earlier.
Portfolio quality remained low by the company’s measures, although group PAR 30, or loans more than 30 days overdue, increased slightly to 2.4%. East Africa was affected by trade regulations in Uganda, while West Africa saw higher arrears linked to Ghana’s rainy season and flooding. Southeast Asia’s higher PAR was attributed to the Philippines, where the business is being restructured.
In Uganda, Keijsers said new trade regulations had a substantial impact on some clients, particularly traders operating without formalized shops or licenses. He said shops in Kampala and surrounding areas were removed and some clients lost both their premises and inventory, requiring them to rebuild their businesses elsewhere.
Revenue, costs and funding
Chief Financial Officer Geert Embrechts said income rose 32% year over year, mainly because of asset growth and higher net interest income. Other operating income included an $11.4 million gain from the sale of non-convertible debentures in India; excluding that gain, other operating income was broadly flat.
Gross yield was 46.4%, while net interest margin declined slightly to 37.4%. Embrechts said the reduction reflected margin pressure in some countries, including Pakistan, as well as partly higher funding costs. For the second half, he said the company expected margins to remain within a 35% to 40% range, while noting that longer-term global interest-rate increases could have an effect.
Total operating expenses increased 27%, driven by personnel, office and transportation costs associated with expansion. However, the cost-to-income ratio improved to 55.6%, continuing a trend from 72.1% in 2023. The company said it continues to invest in staff and digital transformation despite the near-term cost impact.
The funding position rose to $752 million at the end of the first half from $711 million at the end of 2025. Local funding increased 6% during the period, while the company shifted away from funding from development banks and microfinance lenders. ASA International said it had a funding pipeline of more than $300 million for the rest of 2026.
Deposits remain a funding priority. Embrechts said Pakistan is expected to begin its deposit strategy late this year or early next year, while the company is also pursuing a deposit-taking license in Uganda.
India exit and strategic initiatives
ASA International said the wind-down of its India business is effectively complete. Keijsers said the loan book, which stood at $4.3 million at the end of June, was “basically empty” by early September, with no remaining clients, branches or staff. The Reserve Bank of India has approved the surrender of the company’s lending license.
What remains is the final restructuring of the balance sheet and settlements with a small number of lenders, Keijsers said. He added that the business would no longer create an income-statement drag.
The company also highlighted an MSME pilot in Uganda aimed at serving clients between microfinance and traditional banking, and said it expanded its micro-insurance product in Pakistan. Keijsers said insurance fee income was welcome but that the primary business rationale was improving client retention and supporting repeat lending.
The company migrated Tanzania to its core banking system during the first half and is piloting a client app in Ghana. Pakistan and Ghana had previously migrated, and Kenya is scheduled for migration early next year. Keijsers said these markets would represent more than 60% of the client base.
Outlook and expansion plans
ASA International expects full-year 2026 underlying net profit to be in line with or slightly above company-compiled consensus of $70.2 million. Embrechts said second-half costs and expected credit-loss charges were likely to increase somewhat, while the underlying effective tax rate was expected to rise to roughly 40% to 42% from 38% in the first half.
On shareholder returns, Embrechts said the company’s aim remained to pay about 25% of full-year profit as dividends in 2026, within an internal payout range of 25% to 30%.
Keijsers said the Democratic Republic of Congo had emerged as the leading near-term new-market opportunity following diligence work in several countries. ASA International aims to enter the DRC early next year, initially with a limited number of branches and trained French-speaking loan officers before potentially expanding further.
About ASA International Group (LON:ASAI)
ASA International is one of the world's largest international microfinance institutions, providing small, socially responsible financial services to low-income entrepreneurs, most of whom are women, across Asia and Africa. The company's purpose is to reduce poverty and enable female empowerment through its mission of enhancing socio-economic progress of low-income entrepreneurs by increasing financial inclusion.
As at 31 December 2023, ASA International served 2.3m million clients in 13 countries, with 2,016 branches and 13,433 staff.
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